- Tyche Capital Advisors
The US crude inventories dropped last week, posting the biggest weekly decline in seven weeks, due to the falling import, which forced refiners to cut output. According to the Energy Information Administration, the report showed a 4.2 million-barrel plunge in crude supplies last week, which was a sharper decrease than the 2.5-million fall based on analysts' expectations. The report also showed a surprising rebound in supplies from Canada, as weekly imports reached 3.09 million bpd, from the previous week's 2.59 million bpd, despite Canadian oil sands shutdowns amid a massive wildfire. A series of outages around the world, such as wildfires in Canada and a spate of violence in Nigeria, the oil-producing region, has helped cut global oil supply by nearly 4 million barrels per day this month.
This data suggested a bullish sign for oil prices and the US crude oil went up to its highest level in seven months. As a result, the US crude futures hit a high of $49.62 a barrel while Brent crude, in turn, was 65 cents higher at $49.26 after touching $49.69 after the report. Moreover, crude has almost doubled from 12-year lows seen in January on the belief that the market will start to rebalance as supplies of high-cost oil decline and rising consumption by motorists and other oil users reduces a global surplus.
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